Last year, Spruce Company reported the following:

BALANCE SHEET

Total Assets $ $1,090,000$

Total Liabilities $790,000$

Total Shareholders' Equity $ $300,000$

This year, Spruce is considering whether to issue more debt to fund a $$1,245,000$ project or to issue additional shares of common stock. Both options will bring in exactly $$1,245,000.$ Spruce's current debt contracts contain a debt covenant that requires it to maintain a debt$-$to$-$equity ratio of $2\mathrm{.}69$ or less.

Required:

Calculate Spruce's current debt$-$to$-$equity ratio.

Calculate Spruce's debt$-$to$-$equity ratio assuming it funds the project using additional debt.

Calculate Spruce's debt$-$to$-$equity ratio assuming it funds the project by issuing common stock.Last year, Spruce Company reported the following:

This year, Spruce is considering whether to issue more debt to fund a $$1,245,000$ project or to issue additional shares of common

stock. Both options will bring in exactly $$1,245,000.$ Spruce's current debt contracts contain a debt covenant that requires it to maintain

a debt$-$to$-$equity ratio of $2\mathrm{.}69$ or less.

Required:

Calculate Spruce's current debt$-$to$-$equity ratio.

Calculate Spruce's debt$-$to$-$equity ratio assuming it funds the project using additional debt.

Calculate Spruce's debt$-$to$-$equity ratio assuming it funds the project by issuing common stock.

Complete this question by entering your answers in the tabs below.

Required $1$

Calculate Spruce's current debt$-$to$-$equity ratio.

Note: Round your answer to $2$ decimal places.

Current debt$-$to$-$equity ratio